Crisis Report; Strategy on How to Deal With New Entrants in the Market

Category:

Description

MEMO

To:      The CEO, ATshoe Company

From: Bruce Weir

CC:     Operations Manager, ATshoe Company

Date:   November 9, 2017

Re:      Crisis Report; Strategy on How to Deal With New Entrants in the Market

To begin with, it is imperative for any organization to have the understanding that new entrants into the market have detrimental effects on the firm. For instance, Shoes Inc Manufacturing Company may capture a more significant market share than our firm, ATshoes Company, because of the application of cost leadership approach which is coupled with the assumption that the business has imitated the way our organization carries out its operations. To that effect, it is imperative for our company to monitor this threat and act accordingly before it is too late. To accomplish this, we need to apply several ways.

To begin with, the first strategy that ATshoes Company can apply is the coming up with the ways to differentiate its products. Through the differentiation of the shoes, the business should consider introducing new features to the shows because this may act as a catalyst that attracts more customers. For instance, ATshoes Company, the management may decide to come up with the incentives that compel customers to prefer our commodity rather than the shoes from Shoes Inc Manufacturing Company. To that end, we may have to apply more finances to cater for these new expenses which imply that our expenditure will shoot up. We can apply this approach with the hope that the targeted customers are going to be loyal to us and that they are going to buy our products frequently. Therefore, it is significant to utilize this strategy because it may lead to an increase in the sales which will then translate to an increase in the revenues.

Similarly, in the area of marketing strategy, I suggest that we increase the advertising of our products by 15% per quarter through Facebook. This is going to enable us to benefit from the advertisement discount that our prime source of advertising is offering. It is vital for our ATshoe Company to apply this approach because we are going to be in a position to reach out to more people and therefore have the opportunity to let them have the understanding of why our shoe products are the best. To that end, we may be able to navigate from the threat posed by Shoes Inc Company because we may have the majority people who are aware of the quality of the commodities that we are selling. Therefore, our shoes may have a higher market demand than our rivals.

It is also essential for ATShoe Company to consider cutting down on some costs with the objective of reducing the prices of our commodities so that we can compete better on prices.  For instance, since the initial cost outlay of purchasing a factory building for our shoes at Langley, British Columbia is high, I am of the opinion that we should consider other options. One of the options available is to negotiate with the owner of the land that we want to construct the factory and see if we are in a position to lease the land with the choice of making the permanent purchase in future. With this in mind, we may sell our products at lower prices as compared to Shoe Inc Company and therefore be able to capture an excellent share of the market. It is because this strategy is going to be a platform for captivating interest for our products by the customers which is going to enable them to be loyal to us.

In the end, ATshoe Company should anticipate that there will be an increase in the production which will increase the cash flows and the profits. It is because of the suggestions that I have offered above.

Thank you so much.

 

Bruce Weir